Independent contractors

Published: 04 May 2016

CONTROVERSY over America’s “independent contractors”—self-employed workers who do not benefit from regulations governing employment—predates the gig economy by decades. In 1984 the IRS estimated that 3.4m workers were being misclassified as independent contractors. FedEx, a delivery firm, has been fighting lawsuits that allege its contractors are really employees for at least ten years. But the upsurge in apps that connect users with contractors—to drive them somewhere, collect their laundry or deliver their shopping—has reinvigorated this old debate.

On April 21st Uber, a ride-hailing app and the biggest such platform, announced that it had settled two class-action lawsuits brought by drivers in California and Massachusetts. Under the deal, which still needs judicial approval, the classification of Uber’s drivers as independent contractors will not change (though, among some other concessions, they will be able to form a “driver’s association” through which they can air concerns).